Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

Joel Robinson

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

&nbsp;

Developer GURNER™ Group has revealed $1.65 billion in residential sales nationally across the 12 months to December 2025, driven largely by the continued momentum of its Docklands wellness-focused precinct, Elysium Fields.

The sales result was generated across seven projects in Victoria and New South Wales, headlined by Elysium Fields, GURNER™’s $2.75 billion mixed-use precinct planned for Harbour Esplanade in Docklands.

The project has recorded more than $500 million in sales across the first three towers, equating to around 580 apartments sold.

The first tower, Helios, has now sold out of its 240 private residences, with GURNER™ preparing to release a premium penthouse collection comprising 15 three-bedroom penthouses in coming weeks.

[smartcode_project:default project_id=144441 project_image_fid=370975]

Elysium Fields is being developed on the long-held 20,000 sqm Docklands site at 208-226 Harbour Esplanade, which had remained undeveloped for more than two decades prior to GURNER™ taking over the project around four years ago.

Construction has now commenced across four towers ranging between 18 and 30 storeys, with Hamilton Marino and Maxcon appointed as builders.

Once complete, the precinct is expected to comprise around 1,100 residences, alongside retail, hospitality and public realm uses integrated throughout the site.

[smartcode_project:default project_id=144441 project_image_fid=370981]

Designed by Fraser &amp; Partners in collaboration with GURNER™ Design House, the project has been positioned around the developer’s broader focus on wellness-led residential living.

“We don’t sell apartments. We create a true luxury lifestyle that simply doesn’t exist elsewhere in the market today,” Founder and Executive Chairman Tim Gurner said.

“To deliver that requires an extraordinary level of detail, coordination and discipline across multiple verticals, from design and hospitality through to wellness and service.”

“We’ve always believed that living extends far beyond the physical residence. It’s about how you feel the moment you arrive, how you live day-to-day, and the ecosystem that supports that.” 
[smartcode_project:default project_id=144441 project_image_fid=370977]

The project’s design places a heavy focus on landscaping, wellness amenities and biophilic design principles.

Plans include around 3,700 sqm of landscaped gardens and open space throughout the precinct, alongside a retail and dining offering spanning approximately 5,000 sqm.

The broader public realm strategy centres around what GURNER™ describes as the “Path of Life”, an urban forest and landscaped pedestrian environment intended to connect the various buildings and wellness spaces across the precinct.

The apartments themselves will incorporate a range of wellness-focused inclusions, including purified air and water systems, circadian lighting, antimicrobial surfaces, and optional in-home wellness upgrades.

[smartcode_project:default project_id=144441 project_image_fid=370980]

Gurner said the company’s experience through its Saint Haven wellness clubs had directly informed the residential offering now being incorporated into Elysium Fields.

“We’re seeing a clear global shift toward longevity, performance and proactive health,” Gurner said.

“Our role is to deliver that in a way that feels seamless, highly private and beautifully resolved within the environments we create.”

A large component of the wellness offering is planned through the resident amenity and health facilities proposed within the precinct.

That includes plans for bathing and recovery facilities spread throughout the towers, incorporating mineral pools, saunas, steam rooms, flotation therapy, red light therapy and wellness lounges.

The developer is also seeking approvals for what it describes as a “reverse ageing medical clinic” within the precinct.

[smartcode_project:default project_id=144441 project_image_fid=370978]

According to project information released by the group, the proposed facility would include cryotherapy, IV infusion therapy, infrared and dry saunas, PEMF beds, MRIs, DEXA scans, brain scans and blood analysis services.

Within the first tower, Helios, residents will also have access to a dedicated amenity offering known as the Sky Private Club.

The upper 15 levels of the building will include private lounges, dining spaces, rooftop amenities and optional private wellness studios integrated within residences.

The Helios tower itself comprises 260 apartments ranging between 60 sqm and 300 sqm, including a collection of penthouses.

That includes a planned two-storey penthouse spanning around 600 sqm with uninterrupted bay views.

The Elysium Fields precinct is being delivered in partnership with Digital Harbour Holdings, a consortium that includes the Liberman family, which controls the development rights across the Docklands site.

[smartcode_project:default project_id=144441 project_image_fid=370979]

The sales result comes as GURNER™ continues expanding its national development pipeline beyond Victoria.

“We have a strong pipeline across Australia and are now focused on scaling into key markets including New South Wales and Queensland, while continuing to build on our Melbourne base,” Gurner said.

“We currently have more than $3 billion in the market, growing to over $5 billion by October, and expect to materially outperform last year in the 2026 calendar year.”

The result also reflects the continued strength of the upper-end apartment market in Melbourne, particularly for owner-occupier-focused product with large-scale amenity and lifestyle offerings.

[smartcode_project_cta:default project_id=144441]

Record result anchored by the Group’s “utopian” Elysium Fields precinct – defying market headwinds in Docklands.

Elysium Fields drive Gurner to $1.65 billion in apartment sales over 2025

National Australia Bank (NAB) will fund <a href="https://www.apartments.com.au/new-apartments/palmera-residences-gold-coast-18-garfield-terrace-surfers-paradise-qld-4217">Palmera</a>, a $1 billion, 52-level luxury residential tower being developed by Central Equity in one of the Gold Coast’s most tightly held coastal locations at Northcliffe.

The project, launched recently by <a href="https://www.apartments.com.au/developers/central-equity">Central Equity</a>, one of Victoria’s largest private residential developers, comes at a time when construction funding for large residential developments has become increasingly competitive as lenders tighten exposure to the sector.

Multiplex has been appointed the builder, and construction is now underway.

[smartcode_project:default project_id=108274 project_image_fid=365784]

Since its first project, Central Equity has delivered more than 85 residential developments with a combined end value exceeding $8 billion.

Palmera reflects Central Equity’s growing focus on the Gold Coast luxury apartment market and continues a relationship between Central Equity and NAB that dates back to the late 1980s, when the bank funded one of Melbourne’s earliest inner-city residential towers at a time when high-rise apartment living in the CBD was largely unproven.

“NAB’s funding of Central Equity’s $36 million CBD development in the late 1980’s to the financing of the billion-dollar tower today highlights the long-term relationship between the two organisations in delivering major residential projects” said Central Equity Founder and Chairman Eddie Kutner.

He said NAB’s early support was instrumental in helping establish the company’s development model.

“When we commenced our first residential tower in the late 1980s the concept of funding off-the-plan apartments was still largely untested in Australia,” Kutner said.

“NAB recognised the opportunity early and supported the project when others were uncertain. That relationship has now continued for more than 37 years across many developments.”

[smartcode_project:default project_id=108274 project_image_fid=365771]

Central Equity was established in 1987 when Melbourne’s CBD and Southbank precinct were still dominated by warehouses and commercial buildings. Fewer than 100 residents lived in Southbank at the time, and large-scale residential development in the inner city was not widely considered.

Recognising changing demographics and lifestyle preferences, the company began developing high-rise residential projects designed to bring permanent residents into the city centre.

Central Equity has provided accommodation for approximately 40,000 residents across Melbourne’s CBD and Southbank, while also incorporating supporting infrastructure including essential lifestyle facilities like retail spaces, childcare facilities and neighbourhood activity centres.

Central Equity has spent many years assembling the Palmera development site on the corner of Garfield Terrace and Frederick Street in Northcliffe, creating a supersite of around 3,300 sqm.

The developer said the Palmera apartment tower reflects its long-term view of the Gold Coast as a growing and increasingly diversified economy.

[smartcode_project:default project_id=108274 project_image_fid=365768]

Supported by infrastructure including the light rail network, major road upgrades expanded education, hospital and medical facilities and continued expansion at the Gold Coast Airport with more international and domestic flights.

Positioned in the tightly held Northcliffe precinct, the 52-level tower will deliver 347 apartments, targeting buyers seeking a high-end coastal lifestyle, from downsizers to interstate investors.

Designed by Marchese Partners with interiors by DBI, Palmera has been conceived as a next-generation residential offering, featuring a collection of oversized apartments, with premium three-bedroom residences offering sweeping northern views stretching from Surfers Paradise through to Burleigh Heads.

[smartcode_project_cta:default project_id=108274]

NAB funds $1 billion Surfers Paradise apartment development, Palmera

Two years after completing one of the newest developments in North Sydney, developer <a href="https://www.apartments.com.au/developers/aqualand-australia">Aqualand</a> is turning its attention to the rapidly evolving St Leonards apartment market.

The developer, which completed AURA by Aqualand on North Sydney's Walker Street, has lodged plans for a 5,918 sqm site at <a href="https://www.apartments.com.au/new-apartments/33-37-herbert-street-st-leonards-nsw-2065">33-37 Herbert Street, St Leonards,</a> seeking approval for a pair of residential towers rising above a shared podium opposite Royal North Shore Hospital.

The proposal forms part of the broader transformation underway across the St Leonards-Crows Nest precinct, where former industrial and commercial sites are increasingly being redeveloped into high-density mixed-use projects tied to major transport infrastructure.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="2cc428cf-fe70-4cac-9cd5-264ad53af62c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.56%E2%80%AFAM.png?VersionId=otKSnHtbjAvAddOnovyXQMgcAwE6DMe1" />

According to the planning documents, the site sits “within the St Leonards–Crows Nest Strategic Centre, identified by the NSW Government as a key area for accommodating future jobs and housing across Sydney.”

The proposal has been designed by fjcstudio, formerly FJMT Studio, and is being progressed through the State Significant Development pathway due to its scale and affordable housing provision.

The scheme would comprise 413 apartments, including 46 affordable housing units, alongside retail and commercial uses fronting Herbert Street. The project would also include communal open space, landscaping, a swimming pool, gymnasium, children’s play areas and podium-level resident amenities.

Planning documents show the development would consist of a part-13, part-39 storey tower form positioned above a four-storey podium.

“The development comprises a unified podium that activates the street interface, and two setback towers to accommodate new housing supply while maintaining an appropriate human scale at ground level,” fjcstudio noted in its Design Report.

The northern and southern towers have been shaped to respond to the surrounding skyline while also limiting overshadowing impacts to nearby public open space, particularly Talus Reserve.

The design report said the differing tower heights were intended to “contribute to a varied skyline while responding to the surrounding built form context and solar access considerations.”

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="36da62dc-ff9e-41f2-a7e3-7be38373751c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.45%E2%80%AFAM_0.png?VersionId=Mo6Rp2r.XRLTzIfg_PEEpw8NepDH8UBs" />

The site sits directly opposite Royal North Shore Hospital and within walking distance of both St Leonards Station and the new Crows Nest Metro station.

While the site itself sits just outside the formal Crows Nest Transport Oriented Development boundary, the planning documents repeatedly reference its alignment with the broader TOD objectives reshaping the Lower North Shore.

“The site is located adjacent to St Leonards Station and in close proximity to Crows Nest Metro which is within the Crows Nest Transit Orientated Development Accelerated Precinct which has been identified by the NSW Government to support housing delivery,” the Design Verification Statement noted.

According to fjcstudio, the project has been designed to respond to the broader transition occurring across St Leonards, where increasing residential density is being concentrated around transport infrastructure and employment hubs.

“The broader precinct is undergoing significant change, with a mix of existing mid-rise buildings and newer high-density developments,” the report stated.

“Recent and approved projects indicate a consistent shift toward taller built form, typically organised as tower-and-podium typologies with more active ground levels.”

The proposal includes close to 6,000 sqm of retail and commercial space across the ground floor and podium levels, designed to create a more activated street edge along Herbert Street.

Aqualand’s plans would also introduce a landscaped podium shared between the two towers, with communal open space in the form of a podium rooftop designed to support resident interaction and improve urban greening outcomes. The scheme would also introduce pocket parks at the northern and southern ends of the site, including a landscaped area at the corner of Herbert and Ella streets designed to improve pedestrian amenity and soften the streetscape.

&nbsp;

The proposal is being progressed through the NSW Government’s Housing Delivery Authority pathway, which was introduced to accelerate housing supply across the state. The application was declared State Significant Development in April 2025 following an expression of interest process.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="faf6d97d-2671-454f-b85a-fe1c6a7be608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.49%E2%80%AFAM.png?VersionId=diVd28OBVr5.YV.7prrOz.uAanwwwm7a" />

St Leonards has been particularly active with new developments in recent weeks. Developer SP Setia’s <a href="https://www.apartments.com.au/news/nsw/first-look-sp-setia-targets-st-leonards-skyline-with-40-storey-tod-tower">plans for a new 42-storey tower</a> recently went on exhibition through the same pathway, while <a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">Stockland’s 52-storey tower proposal</a> was also recently unveiled.

Aside from the St Leonards project, which is expected to take around nine months to move through the approvals process ahead of a potential 2027 launch, Aqualand is also preparing to launch Boronia, a new apartment project in Roseville comprising around 111 apartments on Larkin Street.

The developer also has approvals in place for the next stage of the Barangaroo precinct, which will feature new residential, retail, hospitality and community uses, alongside a new metro entry across the five-hectare site.

More than 50 new retail destinations are planned for Central Barangaroo, alongside a 270-metre-long boulevard connecting Hickson Park to Nawi Cove. Together with Harbour Park, more than 50 per cent of the precinct will comprise public open space and parkland.

First look: Aqualand joins St Leonards apartment party

Westpac

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GUEST OBSERVER
The CoreLogic home value index held flat in October taking annual growth to 7%, an abrupt slowdown from the 11.4% peak in May.
Policy measures continue to have a material impact. Although official rates remain near historic lows, regulators introduced a new round of 'macro prudential' tightening measures in late March.
Meanwhile a range of other changes have also seen a progressive tightening of conditions facing foreign buyers.
The CoreLogic indexes were overhauled in August and now provide a much better guide to price changes.
Whereas previously it would take three to six months and/or multiple measures to confirm a market shift, the new series appear to give much cleaner signals month to month and are now the clear 'benchmark' for Australian dwelling prices.
For October, the signals are unambiguously soft. Our estimates suggest the last three months have seen a small dip declining at about a 0.9% annual pace in seasonally adjusted terms (note that the Aug-Sep-Oct period typically sees some firming in prices as the spring selling period begins).
Sydney continues to record the sharpest turnaround in conditions, annual price growth slowing to 7.7% in October, essentially halving since July. Melbourne continues to see a much milder turn with price growth still tracking at 11%.
Price growth remains steady but more subdued elsewhere; tracking at 2.7% in Brisbane; and 4.6% in Adelaide with price continuing so slip lower in Perth (–2.5%).
The houses vs units breakdown shows a more pronounced slowdown for houses with annual price growth slowing to 7.2% from 12.4% in May.
Our monthly seasonally adjusted estimates suggest prices have been declining at about a 2% annualised pace over the last three months.
Unit price growth has been more stable throughout, lower through the peak and with a milder slowdown – annual price growth 6.5% down only slightly since the 8.5% peak in July and momentum holding in positive territory over the last three months. 
Notably, the detail suggests the pace of unit price declines in Brisbane and Perth is moderating while price growth in Melbourne units has shown essentially no slowing to date.
The slowdown is likely to carry through to year end. However, the next few months will be a critical gauge of whether markets are starting to stabilise.
To date, the timeliest market measures – buyer sentiment, auction clearance rates and prices – are showing few signs of levelling out. However, some of the pressure from macro-prudential measures may ease off a little.
Click here to read the <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2017/October/er20171101BullDwellPricesOct.pdf" target="_blank">full report</a>.
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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Matthew_Hassan-HHWHptmrw4

Home values flat in October: Westpac's Matt Hassan

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Ann Sherry, the current head of Carnival Australia, the largest cruise ship operator in Australasia, is joining the NAB board.
Sherry is a former chief executive of Westpac New Zealand.
Sherry spent 12 years in senior roles with NAB's rival before joining the cruise ship operator in 2007.
She is also a non-executive director for Sydney Airport, the Palladium Group and Infrastructure Victoria.
She is on the board of Australian Rugby Union, Tourism &amp; Transport Forum and the Museum of Contemporary Art.
Dr Ken Henry, chair of the NAB, says she brings extensive banking and business skills together with a deep understanding of how to drive the right culture, community engagement and customer focus.
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j.ballantyne1990-6AQqhLzZaK

Ann Sherry sails onto NAB board

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Guest Observer
RBA Deputy Governor Guy Debelle says that the reweighting of the CPI has, in the past, resulted in a lower rate of inflation.
In the 7th Warren Hogan Memorial Lecture, RBA Deputy Governor Guy Debelle gave an insightful and pertinent talk on uncertainty and its impact on monetary policy (see <a href="https://www.rba.gov.au/speeches/2017/sp-dg-2017-10-26" target="_blank">“Uncertainty”).</a> 
But following on from yesterday’s weak CPI update, which suggested the Australian economy may have entered a “lowflation” trap (see <a href="https://www.propertyobserver.com.au/https://westpaciq.westpac.com.au/Article/28622" target="_blank">“Inflation has gone AWOL”</a>), we found it interesting that Dr Debelle took some time to outline how the reweighting of the CPI is likely to lower the current pace of inflation.
“The ABS will very shortly update the expenditure weights in the CPI. Because of substitution bias, history suggests that measured CPI inflation has been overstated by an average of ¼ percentage point in the period between expenditure share updates. While we are aware of this bias, we are not able to be precise about its magnitude until the new expenditure shares are published, because past re-weightings are not necessarily a good guide. It is also not straightforward to account for this in forecasts of inflation. However, from a policy point of view, the inflation target is sufficiently flexible to accommodate the bias, given its relatively small size.”.
Readers may remember that back in September we released our research that suggested the reweighting to the CPI could lower our forecasts for the annual pace of headline inflation to end of 2018 by up to 0.4ppts (see <a href="https://www.propertyobserver.com.au/https://westpaciq.westpac.com.au/Article/27495" target="_blank">“Upcoming CPI reweighting to lower inflation”</a>).
Our current bottom up forecasts out to end 2019 are based on our projections for the individual components of the CPI using the current weights in the CPI. We will be updating our forecasts, using our best estimate of how we think the weights will change, in the November Markets Outlook publication.
 
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jrobinson-rf4aSBido9

Uncertainty and inflation: Westpac's Justin Smirk

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Guest Observer
Consumer expectations for house prices have softened slightly in recent months.
The Westpac Melbourne Institute Consumer House Price Expectations Index has fallen about 2.5% between July and Oct, allowing for seasonal fluctuations.
At just over 140, the index still shows price expectations in firmly positive territory, well comfortably above its long run avg of 127.
Of those with a view, nearly 60% expect prices to rise over the next year, 26% expect no change and 15% expect price falls – a net proportion expecting prices to rise of 43%.
Our analysis suggests Oct is a slight seasonal low for expectations (markets tend to cool heading into year end as sellers look to transact before the off season and buyers dry up).
The state breakdown shows a sharper pull back in price expectations in NSW, where the market slowdown has been more pronounced. The shift in expectations suggests the moderation will carry into year end and early 2017.
In contrast, price expectations have continue to rally strongly in WA.
Despite ongoing price slippage in the Perth market, consumer price expectations have swung from clear pessimism to what now looks to be reasonably robust optimism.
While the state market clearly still faces significant headwinds – not least of all a large overhang of vacant dwellings – the sentiment preconditions for a recovery look to be coming into place.
Read the full report: <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2017/October/WestpacRedBookOctober2017.pdf" target="_blank">Westpac Red Book October 2017 (378kb)</a>.
 <img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/The_Red_Book/Red_Book_bites/Redbook-bite-20171023-6.jpg" alt="">
<h2 class="Textspacebefore"> Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
</h2>
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Consumer house price expectations soften: Westpac's Matthew Hassan

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<div>
Westpac, Australia's second-largest lender, has cut its rates for first-time home buyers and investors.
Its affiliates St George, Bank of Melbourne and BankSA are also cutting fixed rates.
The campaign comes mid-spring in the peak residential selling season. Based on Westpac’s credit criteria, residential lending is not available for non-Australian resident borrowers. The offer commences 23rd October 2017 and is only available for a limited time.
They are also targeting a revival in first-time home buyers encouraged by state government stamp duty cuts amid less competition from investors and overseas buyers. 
</div>
<div>Interest-only loans are excluded from the offers, Fairfax Media noted.</div>
<div>
The latest cuts include increasing the two-year introductory offer discount on Flexi First Option home loan from 71 basis points to 84 basis points for the first two years.
The headline rate will be 3.75 per cent which at the end of the term will roll into the product's base rate, which sits currently at 4.59 per cent.
</div>
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Westpac cuts rates to capture mid-spring buyers

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While Australian consumer sentiment has recovered in recent months, views around family finances remain a stand out weak spot. In particular, the ‘finances, last 12mths’ sub-index is down 6.1% vs a year ago and well below long run average levels.
These readings are of real concern.
This backward looking component is already known to have close links with actual spending – something the RBA has noted in the past. Westpac’s latest analysis also confirms the component contains genuine information about current finances.
The ‘finances, last 12mths’  sub-index is closely correlated with growth in labour income, disposable income (i.e. all income after tax and interest) and household net worth with correlations evident at both the national and state level.
The chart below shows how the sub-index tracks vs a combined measure of household finances.
Current readings point to significant added pressure on finances over the last 6mths – our combined per capita measure essentially stalling flat.
Aside from weak wages growth and slowing housing markets, higher mortgage rates for ‘interest only’ and investor loans and associated switching to loans with higher monthly repayments may be impacting.
While some of these drags will dissipate the wider picture suggests family finances will remain under pressure heading into 2018.
Read the full report: <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2017/October/WestpacRedBookOctober2017.pdf" target="_blank">Westpac Red Book October 2017</a>.
<a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/The_Red_Book/Red_Book_bites/Redbook-bite-20171023-4.jpg" target="_blank">Click to enlarge</a>
 <img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/The_Red_Book/Red_Book_bites/Redbook-bite-20171023-4.jpg" alt="">
 
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Why weak sentiment detail around family finances is a real concern: Matthew Hassan

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Westpac, the country's second largest lender, was just trying to make sure that customers are not in too much debt when interest rates rise as part of its focus on responsible lending, according to the chief executive of Westpac Consumer Bank.
George Frazis aired his views on Ross Greenwood’s show on 2GB.
To a question on banks conducting stress tests in the eventuality of a rise in interest rates, Frazis said Westpac’s focus was that the bank was doing the right thing by the customers.
He said when assessing a customer’s affordability of a home loan application, “we add in the order of 2 to 2.5 percent interest rate increase on that loan to make sure you are able to withstand that”.
There’s other checks and balances as well “to ensure you are able to afford that… because what we want to do is to ensure that customers are able to keep their home and continue servicing the home loan and paying off the home loan over the life of the home loan”.
So it was in the customers interest and the bank’s interest to ensure that customers are not in too much debt.
On whether mortgage brokers were being diligent in doing those checks and balances for home loan applications, Frazis said when it comes to serviceability (of loans) the banks double check the analysis to ensure that the customer can afford that.
He said the bank verifies a customer’s income level to make sure it's correct. 
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Westpac calculates up to 2.5 percent higher interest rates on loans to stress test customers: George Frazis

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Westpac’s dispute with the markets regulator over lending practices has brought into focus the limitations of indexes for assessing mortgage applications.
The Australian Securities and Investments Commission had launched civil proceedings earlier this year against the second largest mortgage lender alleging that between December 2011 and March 2015 Westpac failed to properly assess whether borrowers could meet their repayment obligations before entering into home loan contracts.
The bank has denied the claims.
ASIC alleges that Westpac relied on an index, University of Melbourne's Household Expenditure Measure (HEM), to help determine how much to lend to would-be borrowers.
In court filings, ASIC said the HEM benchmark was based on "conservative" estimates of household expenditure”, according to The Australian Financial Review.
The benchmark "represents only an estimate of what Australian families consume" and "was not compiled by reference to expenditure data collected during the relevant period", it said. 
Westpac relied on HEM benchmarks based on data from 2009-10 to assess borrowers for loans that were issued between December 2011 and March 2015, it said adding that the bank only "scaled" the benchmark to account for the location of applicants, number of dependents and marital status. It should have taken into account the total household income, net wealth decile, savings pattern and number of credit cards per household, according to the ASIC.
The National Credit Act provides consumer protections to ensure that credit providers make reasonable inquiries about a borrower's financial situation and assess whether a loan contract will be unsuitable for the borrowers.
Westpac said the court action did not concern any current lending policies or practices.
The bank has defended the HEM benchmark as an "objective measure that does not depend on the quality of a consumer's estimation of their expenses ... [and] excludes discretionary non-basic expenses that a consumer could reduce to meet their commitments without substantial hardship".
Westpac head of consumer banking, George Frazis, has said earlier its assessment processes are comprehensive and take into account a customer’s specific circumstances, including income and expenditure, previous repayments' history and the overall customer relationship.
The bank did not rely solely on the HEM benchmark, Frazis said in a statement in March after the case went to court in March.
"In our experience this survey is a useful input into our loan assessment process, in combination with our understanding of customers' circumstances."
ASIC's statement of claim describes the circumstances of seven loans.
Westpac has previously said all borrowers are up to date with their repayments.
Regulators, include APRA, have been clamping down on banks’ lending practices in recent months to cool the property markets on the East Coast.
Of the major banks, Westpac has the largest proportion of loans made on interest-only terms, reflecting a book weighted towards property investors.
It also asked mortgage brokers to grill clients on why they want an interest-only loan.
Bright Corporate Law principal David Jacobson told the AFR benchmarks like HEM were widely used.
"But they have moved in the last few years to be a cross-check against declared individual expenses rather than a standard default amount to be used as a substitute for getting that information," he said. "In other words, if the information obtained shows declared expenses are lower than the benchmark then the lender needs to get more information.
"But if the declared expenses are higher than the benchmark, lenders calculate affordability on the declared expenses, subject to any other queries or inconsistencies." 
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Westpac, ASIC court battle over responsible lending heats up

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Westpac is cutting mortgage interest rates by up to 85 basis points and waiving fees on other products in time for the peak property season in spring. 
The country’s second largest mortgage lender, is also cutting rates on some of the higher risk interest-only loans, despite revealing recently that its proportion of such loans was above regulatory benchmarks.
Traditionally, the first weekend of spring sales is the most buoyant period for residential buyers and sellers and other lenders are expected to follow suit with rate cuts and promotional offers.
Most offers by Westpac are for new loans only.
The group, which also includes Bank of Melbourne, St George and BankSA, is reducing interest-only fixed rates across one to five-years terms by up to 40 basis points. The new three-year residential investment fixed rate will be 4.64 per cent, according to The Australian Financial Review. 
Another residential investment loan promotion takes 85 basis points off the existing rate to 4.89 per cent.
New four-year owner occupier interest-only rates will be cut by 35 basis points to 4.79 per cent.
Establishment fees are being waived for loans of more than $150,000 for the new offers but the $100 establishment fee still applies, the AFR said.
Earlier this week, the group introduced measures to tighten lending criteria by increasing scrutiny of borrowers' income in response to regulatory pressures.
Even National Australia Bank is tightening its rules for home loan applicants, with photo IDs and supporting documents in response to more regulatory scrutiny of lending practices by banks.
Competition in the home loan market is heating up ahead of spring property season with new research by the mobile website Mozo revealing 23 lenders have dropped owner occupier rates since July 1. 
The comparison site found the average rate cut is 15 basis points, while a handful of lenders have cut by more than double that, despite the Reserve Bank keeping the official cash rate on hold since August 2016. 
"There is an unusually high level of competition in the home loan market this year,” says Mozo director Kirsty Lamont. 
“Competition from smaller banks and non bank lenders in the sub 4 per cent end of the market is red hot with 66 lenders now offering variable rates below the 4 per cent mark.”
Mozo found the most competitive variable rate in the market for a $300,000 owner occupier loan is 3.44%, which is 120 basis points lower than the average Big 4 bank variable rate.
“The difference between the big banks’ rates and the lowest on the market adds up to $2,496 a year for the average borrower on a $300,000 loan,” says Lamont. 
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Westpac slashes rates on some loans ahead of the spring property season 

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Westpac said it had cut the proportion of interest-only loans to 44 per cent in the third quarter from 52 per cent in the second quarter, and was on track to meet the regulatory requirements for interest-only lending.
It said interest-only lending now represents 36 per cent of new loans, down from 47 per cent last quarter.
The prudential regulator, APRA, has asked banks to cap interest-only at 30 per cent by September to cool off investor borrowing and increased the risk of a hard landing in the  property markets in Sydney and Melbourne.
It is "on track to have flow of interest-only lending below 30 per cent in [the] September quarter 2017," Westpac said.
Of the major banks, Westpac has the largest proportion of loans made on interest-only terms, reflecting a book weighted towards property investors who use interest-only loans to take advantage of negative gearing tax benefits, according to The Australian Financial Review.
Analysts expect the bank’s earnings will be hit harder than rivals from the shift to owner-occupier lending.
The pullback comes as Westpac told mortgage brokers it is responding to APRA's "refining" of the criteria used to assess a borrower's suitability to service loans, by changing the way it calculates loans and assesses borrowers' rental interest deductions.
Just last month, the nation's second largest lender, told mortgage brokers to grill clients on why they want an interest-only loan.
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Its investor lending growth is 5.9 per cent. The APRA cap is 10 per cent.
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Westpac also addressed shadow banking in its update, saying the level of its mortgage warehouse facilities - which are provided to 20 originators, both banks and non-banks - have been steady at $10 billion, with $3.8 billion still able to be drawn.
APRA has asked banks not to allow their warehouse facilities to grow at a faster rate than their own lending books.
Westpac said it is closely monitoring such facilities. "This includes understanding the institution's origination and servicing standards, mortgage portfolio parameters and eligibility criteria against both Westpac's and the institution's credit policies, as well as securitisation rating guidelines," it said.
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